Friday, May 28, 2010

Psycho-Galts

by digby

So Jamie Dimon came down from Mt Olympus this week to personally lobby members of congress:

Lawmakers crafting the final language for U.S. financial regulatory reform are being lobbied by their colleagues, consumer groups and industry leaders including JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon.

Dimon placed telephone calls to House members’ offices yesterday. He also sent an e-mail outlining his concerns with the House legislation passed in December and Senate bill passed on May 20, according to two House aides who saw the e-mail and were briefed on the calls.

Interested parties have a little more than a week to press their specific changes before a committee of lawmakers from the House and Senate begin reconciling the bills passed by the two chambers.

“What we’ll see over the course of the next couple weeks will be a tremendous amount of jockeying,” said Kevin Petrasic, a Washington-based lawyer at Paul, Hastings, Janofsky & Walker LLP and former counsel at the Office of Thrift Supervision. “Everyone realizes that the next agreement could be the law.”

Dimon, who maintains regular contact with lawmakers, raised concerns over a rule that would restrict banks’ proprietary trading -- the so-called Volcker rule named for former Federal Reserve Chairman Paul Volcker, according to the aides. He also raised concerns about the “swipe” fees charged to retailers on debit-card transactions and a derivatives provision that would bar commercial banks from having swaps-trading desks.

Dimon insists that he supports the bill, saying that Too Big Too Fail is a bad idea and should be dealt with. Too bad that didn't make it into the senate bill, darn it all to heck.

For some reason, this brings to mind an interesting post by a pseudonymous investment banker that Jonathan Schwarz sent to me recently:

Watching Barney Frank and the House Financial Services Committee attempt to grill the heads of the eight largest bank recipients of TARP funding in front of the cameras recently, I was reminded of a conversation I had with the Chairman of a very large and prestigious private equity firm several years ago.

It transpired at a small dinner party, held at the Chairman's summer home in the Hamptons. Wives, children, and sundry other non-combatants were present, so the occasion was strictly social. Nevertheless, amidst the introductory chit-chat, Your Humble Correspondent revealed the slightly tawdry fact that yes, he was indeed employed at a certain not-to-be-named investment bank and therefore responsible for all sorts of reprehensible behavior. The Chairman chuckled indulgently at that—being, by virtue of his own profession, no stranger to unarmed robbery—and turned the discussion toward those individuals at NTBN Bank whom we might know in common.

Naturally, being a relatively lowly worm in the vast and ever-expanding bowels of NTBN at the time, I could not profess close acquaintance with many of the senior grandees the Chairman was familiar with—people he knew from their frequent trips to his Midtown offices to lick his shoes—but I offered a diplomatic comment or two on a couple of them. I ventured that one particularly poisonous specimen was indeed extremely bright, successful, and ambitious, and we both agreed that he was blessed with quite a remarkable quantity of self confidence.

Apropos of nothing, the Chairman turned contemplative for a moment. Then, looking straight at me, he remarked that, in all his many years in the business, he had never met anyone who had risen to head an investment banking operation who possessed the least measure of humility. I think, in retrospect, this was his kind way of warning me away from ambitions above my station, given my deplorable failure in our conversation to claim sole credit, as a junior investment banker, for more than 50% of NTBN's annual earnings.

* * *

Since that evening, Dear Readers, I have become older, wiser, and more traveled in my industry, and I have seen nothing or no-one that disproves my old friend's comment.

In fact, I will go further and say that I have yet to encounter a senior executive manager at a large investment bank who does not demonstrate a very substantial number of the commonly accepted markers for psychopathy.